'The Government has to act' Care CRISIS as homes for elderly go bankrupt

In the past financial year, 148 care home businesses entered insolvency – an 83 per cent rise on the 81 failing in 2016-17.

The figures sparked a call for urgent action from the Government to tackle a growing crisis in social care which could impact badly on the NHS.

And experts warn of a “care home crash” as closures cause a shortage. Although the Government announced a £2billion package for social care over three years last year, local authorities are spending £6billion less than in 2010.

Cuts have continued this year despite ministers putting in an extra £1billion, say council officials.

Mike Padgham, chairman of the Independent Care Group which advises care providers in north Yorkshire, said: “We have been warning for years that the £6billion cut from social care would eventually mean more and more care homes closing.

“For every home closure there are older and vulnerable people either forced to find somewhere else to live or unable to have a place.

“About 1.2 million people are now going without the care they need and unless action is taken this will very soon be us. We now face a further £2.3billion funding shortfall and that is going to mean more and more people not getting care.

“The Government has to act on the crisis in social care – even if it means we have to fund care better through taxation.”

“It is shortsighted not to support social care. A hospital bed costs far more than a care bed.”

The Care Quality Commission estimates that since 2013, the net number of homes is down by 1,239.

Caroline Abrahams, of Age UK, said: “The fact that the numbers of care homes in deep financial trouble have virtually doubled in the past year means there’s a risk we could be heading for a care home crash.

“This would be utterly disastrous for residents, who are often frail and unwell, and it emphasises how important it is that the Government pumps more funding this year.

“The Government says it intends to publish a consultation on improving the sustainability of care by the summer but more investment is needed now.

“As it is, these startling statistics suggest that many care homes are in a battle for survival.

“We worry that the quality of care on offer to very vulnerable older people is being undermined.”

Local authorities in England and Wales had planned to make savings of £824million in their social care budgets in 2017-18 according to the Associate Directors of Adult Social Services, despite demand increasing as the population ages.

A Competition and Markets Authority report highlighted a £1billion shortfall in public sector funding of care homes in 2017 and the Local Government Association says that the sector faces a £2.3billion gap by 2020.

Accountancy firm Moore Stephens, which released the insolvency figures, found the cost of providing a high standard of care has increased over the years. The National Living Wage rose again last month to £7.83.

It stood at £6.70 just three years ago. The annual rise places increased strain on care home margins. The average home now spends 52 per cent of its turnover on wages.

Demand is rising for qualified nursing staff so care homes are increasingly relying on expensive agency workers. Owners may also see rising interest rates this year.

Lee Causer, a partner at Moore Stephens, said: “Care homes should be benefiting from an ageing population. But they are not.

“Care homes are not receiving enough local government funding to sustain the profit margins necessary to run a successful business. Without additional income, homes will not be able to remain solvent.”

A report by the Public Accounts Committee in September said that an “intolerable” number of older patients were waiting too long to be discharged from hospital, costing the NHS £170million a year.

The MPs said that every day, 3,500 older people remain in hospital in England after being declared fi t to leave because arrangements had not been made for them to move. In 2011, operator Southern Cross shut down and as many as 31,000 elderly and vulnerable residents had to find somewhere else to live.